Analysis for AZO
- 📈 Growth — 22/30
- 💰 Profitability — 18/20
- 🏦 Financial Health — 6/20
- 💵 Valuation — 8/20
- ⚠️ Risk — 7/10
Summary:
📈 Growth & Financial Trajectory
Over the eight-quarter span from Q2 2024 to Q3 2026, Revenues rose from $3.86B to $4.84B, with a sharp seasonal spike to $6.24B in Q4 2025 before retreating. Net income grew from $608M to $641M, signaling scale-up but modest bottom-line leverage.
💰 Margins & Cash Flow
Gross margin remains robust, with operating income sustaining strong margins as volume fluctuates. Cash flow from operations stayed positive in most quarters, while investing and financing activities showed volatility; the Q4 2025 period reflected heavier cash use, consistent with large top-line movement.
🛡️ Balance Sheet & Liquidity
Balance sheet shows persistent negative equity (roughly -$3B to -$3.22B), with total liabilities well above assets, indicating leveraging pressure. Current assets typically cover near-term liabilities, but elevated current liabilities imply ongoing liquidity needs.
⚠️ Key Drivers & Risks
- Drivers: Aftermarket auto parts demand and the retailer's expansive store network drive steady volume.
- Risks: Cyclicality of auto spend and continued negative equity stress valuation and resilience.